How did Bitcoin Price Hit $23,777
Bitcoin gained over $4000 just in two days. How did it happen?
The price of the leading cryptocurrency only two days ago crossed the psychological barrier of $20,000. But, amazingly on the same day, Bitcoin continued its growth surging a new All-Time-High above $22K. Remarkably that BTC was just $19,300 and suddenly grew $3000.
But the most advanced digital asset didn't stop there.
Then BTC has reached $23,777 on Bitstamp which is now an ATH level. Thus, the most valuable virtual currency completes a massive 560% ROI since its lowest position back in March.
How did Bitcoin hit its new ATH?
There are many reasons why BTC surged dramatically since October. Multiple investments from MicroStrategy, or Grayscale managing Bitcoin for their clients, PayPal adopting BTC, and many more growth factors.
The level of inflation of the most advanced virtual currency also halved, but anyway it all started with MicroStrategy.
The international giant firm MicroStrategy has invested $425 million in Bitcoin in August and September 2020. Then was Square which invested 1% ($50 million) of its total assets in October. MicroStrategy and Square have made amazing revenues of 103% and 113%, worth now $864 million and $106 million Bitcoin accordingly.
Besides, there are Grayscale Investments which had purchased over 40,000 Bitcoin ($600 million now) for its clients in October. There is no doubt that these investments caused a great public interest in Bitcoin.
Bitcoin halving
The Bitcoin halving could also influence the rise of the most valuable virtual asset. The BTC halving happens every 4 years and cuts the number of coins miners get for adding new blocks to the Blockchain in half. Meaning, only half of Bitcoin has been created since May 2020.
“With the Bitcoin halving in May, this stream of supply has halved, meaning that fewer Bitcoin is put up for sale by miners. This can contribute to a shortage of supply and therefore to a rising Bitcoin price,” said Elias Strehle, a researcher at the Blockchain Research Lab.
This is the basics of economics, and it’s not only touching Bitcoin mining. If supply is plummeting but demand stays the same it causes the price surge.
“Think of apples: If this year's harvest is extraordinarily good, then prices of Apples will fall. If, however, apples are scarce due to a bad harvest, then prices of Apples go up,” says Ingo Fiedler, co-founder of the Blockchain Research Lab.
PayPal
One of the main points also could be PayPal which is reportedly buying 70% of newly mined Bitcoin, causing the scarcity of the supply.
Speaking about PayPal, a few days ago the company confirmed that all of its customers could now access Bitcoin. In the near future, the firm will bring this option to Venmo.
“Just bought Bitcoin on Paypal, they made it super easy. This is how Bitcoin goes mainstream,” said a Twitter user BitcoinBF.
2020 was quite a year started with massive fires in Australia, then a global COVID-19 pandemic that made markets collapse, but Bitcoin for sure gave all of us a breath of fresh air just 2 weeks before the end of the so rollercoaster 365 days. 2021 is going to be even more excited than many predict, there is no doubt.
